Coalition plans to block debt limit: Hockey

Opposition treasury spokesman Joe Hockey said the coalition would move to block the government’s plan to boost the Commonwealth debt limit and pledged to lower personal tax rates.

“Frankly, we’ve got to pay down the debt,’’ Mr Hockey said at a National Press Club address in Canberra on Wednesday. “We do not accept the current proposed justification for an increase in the Commonwealth debt limit to $300 billion,’’

Mr Hockey said the Opposition would move in parliament an amendment to the budget bills seeking to halt the increase and trigger “a separate debate about the $50 billion increase in the debt ceiling."

He said the cost of servicing $145 billion in debt would rise to $8.2 billion a year, enough to fully fund the national disability insurance scheme or build eight new teaching hospitals a year. “It is $22 million a day in interest alone,’’ he said.

“One of the reasons why government debt keeps rising while the budget is supposedly in surplus is that spending on the NBN and Clean Energy Finance Corporations are “off budget" and are financed through increased borrowings," Mr Hockey said.

He declined to rule out whether a future coalition government would increase taxes to fund the NDIS.

Mr Hockey’s address outlined a “four pillar" plan to boost growth by pledging a return to surplus, deliver “lower and simpler taxation,’’ improved productivity, and a closer engagement with Asia.

“We will offer personal tax cuts on today’s personal tax rates that will not be funded by a carbon tax, but by prudent savings in government expenditure," Mr Hockey said.

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“We will also offer a modest cut in company taxes,’’ he said. “This too will be funded from the budget and will not be funded by a carbon or mining tax."

“Overall taxes will be lower under the Coalition when compared with Labor in the same financial year.

“Good tax administration is almost as important as the tax policies we put in place."

Mr Hockey said a new coalition government would “immediately commence’’ its program to consolidate parts of the bureaucracy, including by merging the Department of Climate Change into the Department of Environment.

Within four months of taking office, Mr Hockey said a Commission of Audit would report on the findings of a “top-to-bottom independent review of public spending to identify savings and efficiencies in addition to those we have already identified in Opposition."

“By natural attrition we’ll reduce the public service by 12,000 over two years,’’ he said.

He also pledged to publish the structural deficit position in the Budget Papers and mid-year review every year.

“Personally, I think Joe Hockey should desist from playing this Tea Party politics and running such an irresponsible scare campaign about our debt ceiling," he said.

“The fact is ... we expect to be under our debt cap of $250 billion at the end of every year ... but we have received advice from the office of financial management because of in-year financing responsibilities."